Kids need honesty and assurance in today's economy

When the economic downturn hit, Tim Gagne and his ex-wife, Suzanne Zuckerman, were open with their daughters about the need to be more frugal.

Zuckerman's new husband was laid off from two jobs in a row. Gagne saw cutbacks at work and had his 401K "tank," just as millions of other Americans did. Budgets had to be tightened in both households, yet they kept level heads.

Gagne and Zuckerman, both of Newtown, made it through a divorce staying friends. They have a "glass-half-full" philosophy on life and instill that in their girls, Madeleine, 15, and Lauren, 13.

By presenting that positive outlook in the face of economic adversity while having an honest exchange with their daughters about economic hard times in the two families, Gagne and Zuckerman are trying to keep the girls stress-free.

They keep a semblance of normalcy in their day-to-day lives and allow the girls to join in making decisions about not spending money for certain items in order to save for more important ones.

"It's a challenge," Gagne, 41, said. "It's hard to isolate them from what's going on. I downgraded my cable TV service one week when they weren't with me. But when they're here, I buy brand name groceries rather than the store brands I buy for myself. If it was just myself, I might cut back even more."

WHAT THE EXPERTS SAY

What Gagne and Zuckerman are doing is on target, according to
Jamie Woolf
, a San Francisco leadership consultant and mother of daughters 10 and 14 years old. Parents are the leaders of the family, the architects of the family structure, she said.

Woolf recently wrote a book titled "Mom-in-Chief: Wisdom from the Workplace Can Save Your Family From Chaos."

She believes that just as the CEO of a business handles stress to keep his work force balanced, parents must handle adversity in the family to keep their kids stress-free.

"Their mom and I try to keep a sense of normalcy," Gagne said about his and Zuckerman's interaction with their daughters. "Yet the girls know we have to be very smart and very practical about how we spend."

Brookfield marriage and family therapist
Laura Erhardt
said, "Parents can't panic. Parents have to take care of themselves first, dealing with their own stress about financial situations. Then they can help their kids."

The way you handle life crises will directly affect the way your kids handle them, Erhardt said.

Woolf agrees.

"Crafting reassuring, but truthful, messages about today's economy when talking to your kids can make the difference between giving them assurance to deal with what they hear on the news and scaring them to death," Woolf said in a recent phone interview.

"The first thing parents have to realize is that their kids are already aware to some degree about what's happening in the world."

Tim Gagne sits down with his daughters and talks about the stock market and problems specific large companies are having. He presents it as a "temporary downside" in the economy.

"Our parents keep us informed about a lot of topics. I like it. It shows they respect us more and can trust us to know what's really going on," she said.

However, parents "can err in saying too much," Erhardt said. It is important to work out what you will tell your kids, to be on the same page when you discuss financial situations or economic downturns in the family with them, she said.

Gagne and Zuckerman share a unified message when dealing with their daughters. Gagne, a public relations officer with Family & Children's
Agency in Norwalk
, has seen cutbacks and layoffs in his workplace. Forty percent of the capital to run the agency comes from federal funds.

Zuckerman's new husband has been laid off twice and is doing small writing jobs he comes by through contacts. She is a nurse at
Danbury Hospital
, and while she feels her job is secure, money is tight.

Gagne sees his job as secure since he avoided the latest round of cutbacks. While his "retirement fund has tanked," he said at 41 he still has years before retirement to rebuild it.

The girls know what is happening in both homes, and their parents present a positive, if cautious, picture.

"It's important to be open with them so that they know to save and to choose what they want to spend their money on," Zuckerman said. "In a couple of years, Madeleine will be out on her own, making her own decisions and keeping her own finances."

HOW A SINGLE MOM HANDLES FINANCES

Jenn Wolke, a single mother in Danbury, talks to her daughter, Sara, 11, about their financial situation. Wolke divorced last year, lost her job in June and didn't find work again until January.

"We're playing a game of catch-up now," Wolke said. "I've been up-front with Sara. She's a very emotionally mature young lady and I've always talk to her about our situation."

Sara helps her mother cut corners, forgoing snack and pastry buying when they go to the market and being as frugal as she has been taught to be since she was a little girl.

"I talk to Sara about what it takes to earn money and had her look for ways to earn it herself, whether baby-sitting or helping out the neighbors," Wolke said. "She knows it doesn't make any difference what size home we live in or how much money we have to spend. We still have our friends and family."

Parents need to give the kids something to do to help out, Woolf said. A Sunday afternoon of clipping coupons, or choosing items to sell at a tag sale, gives kids a sense of control in the situation.

"Children are especially prone to feeling hopeless," Woolf said, "particularly in an economic crisis that they may not fully understand. Getting them involved will empower them and make them feel better about the situation at hand."

Madeleine decided not to have a sweet 16 party for her birthday April 28, although many of her friends are having theme parties for theirs.

"I'd rather have my mom and dad save the money they would spend on a party to go toward my trip to Disney World," Madeleine said. "My dance class has been invited to perform there."

When Madeleine and her mom go to her dance class, they make sandwiches at home and take them to eat on break rather than buying them. When Madeleine and her sister go to the movies, they spend their own money earned baby-sitting or dog walking, and they don't go as often as they used to.

Madeleine is looking for a part-time job, but she's found the jobs teenagers normally fill, like clerks or baggers in grocery stores, are taken by adults laid off from better-paying jobs, she said.

"The girls have always had allowances and been taught to spend carefully and to save," Zuckerman said "The difference between a few years ago and now is that I wasn't watching spending as much as I am now.

"I think they're a little surprised at how closely I'm watching the money."